Independent Stock Research to Reach 21% of the $7.09 billion Research Budget
|In an article about independent stock research in Japan, Wall Street Journal has mentioned that in 2002, U.S. and U.K. asset managers spent $870 million on independent reports, according to Tabb Group.|
This is slightly less than 12% of the total $7.58 billion spent on stock research by Asset Managers in U.S. and U.K. TABB Group expects the independent research budget to almost double this year to $1.49 billion, or about 21% of a total $7.09 billion research budget.
Money managers spent $2.8 billion on in-house research last year, up from $1.59 billion in 2002, according to Integrity Research Associates LLC, a Darien, Connecticut-based adviser to fund companies. They cut spending on Wall Street research to $5.2 billion in 2005 from $5.4 billion the previous year.
Total commissions paid for trading U.S. stocks dropped to $11.3 billion in 2005 from $13.4 billion in 2002, according to a survey of 239 fund managers by industry consultants at Greenwich Associates in Greenwich, Connecticut. The proportion allocated to research stayed constant at 40%, the survey found.
Ten of Wall Street's largest firms in December 2002 agreed to pay $1.4 billion to settle allegations by state and federal regulators that they provided misleading stock advice to investors for the benefit of corporate investment banking clients.
As part of this settlement, the firms must also spend $450 million over five years on independent stock analysis and information to ensure their investors receive unbiased research, and pay another $85 million for a nationwide investor education program.